It seems that the property market is the topic on everyone’s lips at the moment. The huge boom throughout 2020 and 2021, which saw house prices soar, has been met with rising interest rates post-pandemic leaving a lot of homeowners in the lurch with an increase in mortgage repayments.
But it’s not all doom and gloom with home loan experts weighing in on how mortgage holders can make the best of the current situation. The question everyone with a home loan wants to know is: Can you save money in a rising-rate environment?
The team at Homeward Finance say yes.
“Between May and September, property owners on variable-rate loans could have seen interest rate hikes of around 2.5 percentage points, depending on their loan,” says Homeward Finance Managing Director, Steve Villios.
But what does this look like in repayments?
A $500,000 loan with monthly principal and interest repayments over a 30-year term and your interest rate increased from 3% p.a. to 5.5% p.a., your repayments would have increased from $2,108 to $2,839 – an increase of $731.
If that loan was $1 million, repayments would have increased from $4,216 to $5,678 – an increase of $1,462.
But instead of sitting back and accepting your fate, Homeward Finance recommends negotiating a lower interest rate with your current lender is something they do daily for their customers.
“When we negotiate with your current lender to get you on a better deal, that is called repricing. This can be a straightforward process and your interest rate or fees change, but the lender remains the same.
“If we find you a better deal with a different lender and move you across, it is called refinancing. Many lenders offer lower interest rates to new customers, and/or cashback incentives where they could offer $2,000 or more for you to move your loan to them.
“This will need to be weighed up with any potential fees to move, so we will run the calculation for you and let you know if it would be beneficial for you over the longer term.”
Navigating finances can be a struggle to understand for those not in the know but the team at Unley-based Homeward Finance, are dedicated to simplifying the ins and outs for us mere mortals and get you the best deal possible.
If this has piqued your interest and you’d like to find out more, click here or call Homeward Finance on 08 8179 0500 for a no-obligation chat.
The information provided on this site is on the understanding that it is for illustrative and discussion purposes only. Whilst all care and attention is taken in its preparation any party seeking to rely on its content or otherwise should make their own enquiries and research to ensure its relevance to your specific personal and business requirements and circumstances. Terms, conditions, fees and charges may apply. Normal lending criteria apply. Rates subject to change. Approved applicants only.
Homeward Finance Pty Ltd ACN 641670519 is authorised under LM Broker Services Pty Ltd Australian Credit Licence 517192.
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